Whole Foods Whole People, Whole Planet, Matthew Brock Johnson
Overview â—? Purpose is to conduct marketing research for Whole Foods and to use this research to connect with the target audience â—? Conducting this research will benefit Whole Foods and help them achieve their long term marketing goals
Brand ● Founded in 1980 in Austin, Texas ● Focused on providing “ finest natural and organic foods available” ● 13th largest grocery store chain in the U.S. ● Recently acquired by Amazon ● Operates in three different countries, with 448 out of 470 stores spread throughout 42 U.S. states
Product ● Classified into three groups : non-perishables, prepared foods and bakery, and other perishables ● 11 regional distribution centers which distribute a full range of perishable products to its stores around the U.S. ● All products are free of hydrogenated fats, artificial colors, flavors, preservatives and sweeteners ● Adhere to the Global Animal Partnership 5-Step® Animal Welfare Rating ● When Amazon bought Whole Foods Market they immediately announced the reduction of prices on certain products
Competition: Whole Foods ● Whole Foods competes with local, regional, national and international supermarkets. Also they compete with warehouse membership clubs, and smaller specialty stores. ● Whole Foods have a very broad selection of products for customers ● High liquidity puts them into position to fund any opening that they are faced with ● Whole Foods puts major emphasis on expanding their brand nationally and also internationally, resulting in more than 75 new stores in the past three years ● Amazon will bring Whole Foods a multitude of new customers, while still keeping their authenticity
Kroger Strengths ● Largest retailer in the U.S. ● Only major US supermarket company to adopt an economical threetier distribution system ● Based on total sales, one of the largest food retail chains in the U.S. Weaknesses ● Involved with many lawsuits ● Have frequent recalls ● Profitability has went down over the years
Walmart â—? Strengths Largest retailer in terms of revenue in the world Numerous programs that conquer the everyday lowest prices Take the least amount of time to sell their inventory â—? Weaknesses Being involved in legal matters could taint their brand image, like being sued for selling contaminated food
Trader Joe’s Strengths ● One of the hottest up and coming retailers in the U.S, boasting 344 stores in 25 states ● Stores are usually smaller but have a very specific selection of products, with 80% of the store being Trader Joe’s brand ● Pride themselves on staying one step ahead of Americans and providing the right amount of new items Weaknesses ● Some believe they're losing their authenticity which in return can make consumers lose brand loyalty over time ● Others believe it is too much freedom and more control needs to be put into place
Weis Markets
Strengths ● Focused on energy conservation in their stores, which can attract more customers that really care for the environment ● Having promotional deals increase customers visits, which lead to more sales ● Have a debt free capital structure so they can move freely with their money and don't have to worry about interest, which takes a toll on many companies Weaknesses ● In light of recent recalls, it can tarnish the brand image and discourage customers from shopping ● Being concentrated in certain areas around the U.S. and not having any international business be bad, with nothing to fall back on
Winn-Dixie Stores, Inc. Strengths ● Established regional retailer which gives them room to bargain and a lot of brand recognition ● They have remade stores, added more food and design options, and tailored it to certain neighborhoods of people Weaknesses ● In two areas while others retailers are spread throughout the U.S. and the world ● Recalls on certain products that can cause allergic reactions and medical problems
Smaller Speciality Stores Strengths ● Provide options that are very particular and can save you from busy supermarkets ● Don’t have to compromise on price and can grab the quality product you want ● Don’t have to worry about impulse shopping because there is only so much to buy Weaknesses ● Usually have less stock, and dont have the resources and revenue to gain a substantial share of the market
Natural food stores Strengths ● Sole purpose is selling a specialized selection of health foods ● Started to be built in different areas to maximize their availability and sales ● Your health purchase will most likely be customized to your liking or what you prefer Weaknesses ● With the emergence of organic and natural foods in many supermarkets, the business of natural food stores will have a very hard time gaining any more market share.
Warehouse membership clubs Strengths ● Have the biggest savings on certain items ● Consumers have access to different services like discounts on movie tickets, insurance, legal service for businesses and much more ● Great return policies ● Free samples on the weekends ● One-stop shopping Weaknesses ● Most don’t accept coupons ● Many customers can't get past the fact you have to pay a membership fee, so it is hard to gain valuable attention
Profile of Target Market ● Generation Y ● Between the ages of 18-24 ● Women ○ 15 percent more likely than men ● Upper-class ○ 77 percent more likely to have a personal or familial HHI of $150,000 + ● Asian-American ● Occupation in Management, Business, or Financial Operations ○ 47 percent more likely than any other occupation ● (MRI 2017, Shopping: Food Stores, Grocery & Warehouse/Club Stores - Times Shopped)
Media Habits and Psychographics ● TV ○ Bloomberg Television ○ HBO ○ Tennis ● The New Yorker ● Airbnb
● (MRI 2017, Shopping: Food Store, Grocery & Warehouse/Club Store - Times Shopped)
● Tech savvy ● Live in the moment ● Focused on health and self-improvement ● Trust in the organic label ● (Claritas, 2018)
Marketing Problems and Opportunities Related to Millennials ● Millennials are starkly different than the generations before them ○ Now more influenced by non-traditional advertising ○ More diverse (no longer a “one-size-fits-all model”) ● Strong ties to technology ○ Cell phones ○ Social Media ○ Internet ● Millennials appreciate ads, and are aware of their purpose
Strength s â—? Prices Have Declined- The brands offered at Whole Foods are known to be relatively expensive and unaffordable but Whole Foods took a major step in in becoming more price friendly. Price cuts were applied to many of Whole Foods best selling items like kale, chicken and apples. Price cuts as large as 48%. â—?
Strong Variety in Items Sold- Americans are willing to spend more money at a store
if they can get all their shopping done at that location. Whole Foods variety allows customers to shop for all different types of products. Items sold range from dog food, to your favorite desserts. â—?
New Management Team- Amazon is now the owner of Whole Foods and is making
large changes to the grocery store. Amazon is known for putting customer benefits first (ex: Prime student) and are implementing the same values in Whole Foods.
Weaknesses � Small International Presence- Whole Foods has a small international reach with stores only in the United States, Canada, and the United Kingdom. Grocery Stores like Edeka, have a larger international presence have seen their brand awareness increase. � Declining Sales/ Low Brand Loyalty- Whole Foods has more than 400 stores and has seen a decline in sales in more than 40 percent of their stores in the last 6 months. Customers don’t have a large loyalty toward Whole Foods and are willing to shop elsewhere if it is more convenient.
Opportunities ● Want For Private Brands Rising- More than 31 percent of Americans prefer to use brands that aren’t as accessible to others. Whole Foods offers more than 100 brands that are exclusive to specialty stores only.
● New Cashier Checkout System- Amazon is creating a new checkout system. This new system allows customers to walk into the store, put things in their tangible carts and leave without checking out with a store associate. The items will be added to their virtual account and withdrawn from their account when they leave adding a level of convenience to their shopping trip.
Threats ●
Intense Competition in High-end Grocery Store Market-
Trader Joe’s is another organic food company that offers healthy foods and shares locations with Whole Foods in many different states. Whole Foods markets itself as a unique, specialty store but with Trader Joe’s offering prices that are competitive , Whole Foods may see a shift in customer loyalty and sales. ●
Kroger and Target Merge- The merging of Amazon and Whole
Foods is one of the largest merges in supermarket history. Target and Kroger are looking to do something similar. This new partnership aims to improve Krogers e-commerce skills and Targets grocery market.
Previous ISC Strategies ● Amazon prime users receive deals on products and can take advantage of 2 hour delivery system ● Teamed up with EARTH university. Bananas are sold in Whole Foods stores and all of the proceeds go directly to the university ● This demonstrates that Whole Foods cares for the environment as well as the products they sell ● Whole Foods invested more than 26 million into advertising in the last year ● They can be found on multiple social media platforms such as Facebook, Twitter, Instagram, and Youtube
Marketing Research Objectives 1. To determine consumer perception of Whole Foods in comparison to direct and indirect competitors 2. To enhance social media presence and reduce spending on ads 3. To understand why college students choose whether or not to shop at Whole Foods
Objectives of Focus Group Interview 1. To determine consumer perception of Whole foods in comparison to competitors 2. To determine the best way to enhance Whole Foods’ social media presence 3. To understand why college students choose whether or not to shop at Whole Foods
Focus Group Interview: Subjects ● Sunday May 20, 2018 Bill Gatton Student Center ● 11 participants ages 18-24 ○ 7 females ○ 4 males ● Convenience sampling
Focus Group Interview: Design 25 pre-written questions ○ ○ ○ ○
General grocery shopping experience Whole Foods Competitors Advertisements
Focus Group Interview: Analysis ●Data “I will sometimes go to & Whole Foods to grab specific, healthy things that I can’t find at Kroger, or even to eat Results
at their buffet, but I don’t think of it as my staple grocery store.” (Allie, 22) ● “I’m a college student, which means I’m poor. I’m fine not paying for the higher quality brands at Whole Foods if it means I end up saving money.” (Taylor, 21) ● “I will go out of my way to buy stuff at Kroger because I know I’ll get points that I can use on gas and discounts.” (Gracie, 20)
Word Associations Whole Foods ○ ○ ○ ○
“Planned” “Experience” “Difficult” “Frustrating”
Whole Foods Social Media ○ “Colorful” ○ “Natural” ○ “Satisfying”
Kroger ○ “Convenient ” ○ “Easy” ○ “Discounts”
Focus Group Interview: Conclusion ● College students value convenience and price over health benefits ● Rewards programs and discounts are important ○ Limited income
Objectives of Survey Questionnaire 1. Further expand knowledge in understanding how college students shop for groceries. 2. Discover how college students currently perceive the Whole Foods brand and evaluate the quality of their products. 3. Understand strategies to further improve the connection to college students.
Sampling Methods & Design ● College Students, male and female, between the ages of 18-24 at the University of Kentucky ● Collected results from 5 Males and 28 Females for a total 33 participants (n=33) ● 18 year olds: 2, 19 year olds: 10, 20 year olds: 4, 21 year olds: 12, 22 year olds: 2, 23 year olds: 3. Average= 20 years old ● Conducted through online qualtrics survey over the the course of four days, May 25th, 2018 to May 29th, 2018. ● Sent out through text, email, and media posts to college students at UK
Data Results: Frequency We found that the mean the highest amount of participants (48.48%) go grocery shopping once a week or more often. This means that 15 of the respondents shop quite frequently, and would care a lot about the products they purchase.
Data Results: Preference The participants were requested to rate the importance of location, value for money, in-store coupons or specials, friendliness of staff, and ready to eat more healthy meals. Location (M=4.27; SD= . 674) and value for money (M=4.36; SD= .822) were most important.
Data Results: Character The participants were asked to rate Kroger, Aldi, Trader Joe’s and Whole Foods on best quality, abundance of healthy products, and favorite overall. Whole foods won in best quality (M= 1.79; SD= .992) and abundance of healthy food options (M=1.36; SD= .699).
Data Results: Income The participants were asked to tell us how often they would shop if income were not a concern. We actually found that the data dropped, meaning they would shop at more expensive places. Dropped from 48.5% to 45.5%
Data Results: Participation We asked that the participants tell us how much they would spend on each product (vegetables, fruit, meat, drinks, toiletries) if they were given $100 to spend at Whole Foods. respondents said that would spend the majority of the $100 on meat (M=28.32; SD= 14.36). Most of the respondents (29.4%) also stated that the most they would spend on meat at Whole Foods was $20.
Data Results: Social Media We asked the respondents to look at the Instagram feed and tell us their thoughts about the feed. All of the categories were ranked 4 and above.
Survey: Conclusion Through the results of the survey, we found that a lot of the concerns were similar to the ones in the focus group interview. Those concerns are that college students value convenience and price over health benefits when it comes to grocery shopping. There isn’t a Whole Foods close to campus and the prices aren’t low enough to motivate students to drive all the way to The
Positioning Statement & Marketing Recommendati on Create rewards program with worthwhile discounts and rewards Take advantage of social media
Overall Research Findings Secondary Research - SWOT Analysis Threats 1. Intense competition in the grocery store market 2. Possibility of Target and Kroger merging Strengths 1. Lowered prices 2. Strong variety of items sold 3. A new management team in Amazon, who are known for putting customer benefits first
Weaknesses 1. Small international presence 2. Declining of sales 3. Low brand loyalty between customers. Opportunities 4. The want for private brands rising in the past year 5. New cashier checkout system that doesn't require customers to checkout with an associate.
Overall Research Findings Exploratory Research - Focus Group Interview Involving students attending the University of Kentucky Major takeaways â—? College students value convenience and price over health benefits â—? Rewards programs and discounts are important because of a limited budget
Overall Research Findings Primary research - Survey Questionnaire Sent out and answered by 33 college students Major takeaways
● College students go grocery shopping frequently ● Location and value for money are the most important factors for college students ● College students believe Whole Foods has the best quality and abundance of healthy products ● College students would shop at more expensive places than Whole Foods if money wasn't a concern ● If given $100 to spend at Whole Foods college students would spend most of the money on meat but the most they would pay is $20 -College students love Whole Foods Instagram feed